"...As a part of this ongoing investigation, the Committees have learned that the IRS Chief Counsel's office in Washington, D.C. has been closely involved in some of the applications. It's involvement and demands for information about political activity during the 2010 election cycle appears to have caused systematic delays in the processing of Tea Party applications. To better understand the IRS Chief Counsel's office role in this matter, we write to prioritize our outstanding document request as well as to request additional documents..."The letter explains that during recent interviews of IRS employees, including Carter Hull, a tax specialist and self described 501(c)(4) expert with 48 years of experience at the IRS, the Committees were informed that Tea Party applications under his review were, in an unusual turn of events, referred to the Chief Counsel's office for further review at the direction of Lois Lerner, the head of the Exempt Organizations division, and that the IRS Chief Counsel is one of two politically appointed officials in the agency.
"In April 2010," the letter says, "Mr. Hull was instructed to scrutinize certain Tea Party applications by one of his supervisors in Washington. According to Mr. Hull, these applications were used as 'test' cases and assigned to him because of his expertise and because IRS leadership in Washington was 'trying to find out how [the IRS] should approach these organizations, and how [the IRS] should handle them.' In the course of working on these applications, Mr. Hull requested additional information from the taxpayers through what is termed a development letter.""...Once he received responses, based on his decades of experience," the letter says, "he determinbed he had enough facts to make recommendations whether to aprove or deny the applications ... However, Mr. Hull's recommendations were not carried out. Instead, according to Michael Seto, the head of Mr. Hull's unit in Washington, Ms. Lerner, gave an atypical instruction that the Tea Party applications undergo special scrutiny that included an uncommon multi-layer review that involved a top advisor to Lerner as well as the Chief Counsel's office..."
The letter describes a Committee staff interview with Mr. Seto, stating that "...[Ms. Lerner] sent me email saying that when these cases need to go through multi-tier review and they will eventually have to go [through her staff] and the chief counsel's office..."
"...Indeed, according to Mr. Hull, sometime in the winter of 2010-2011, the senior advisor to Lois Lerner told him the IRS Chief Counsel's office would need to review these applications. Mr. Hull also indicated this was the first time he sent an application to Ms. Lerner's senior advisor..."An Oversight Committee statement emphasizes that "...testimony from career IRS officials in Washington, D.C. that Director of the IRS Exempt Organizations division Lois Lerner overruled the judgment of a career Washington, D.C. IRS lawyer and ordered Tea Party cases to go through a multi-layer review that included her senior advisor and the IRS Chief Counsel’s office. The IRS Chief Counsel’s office is led by William Wilkins, one of two Obama Administration political appointees at the IRS..."
"...'As a part of this ongoing investigation, the Committees have learned that the IRS Chief Counsel’s office in Washington, D.C. has been closely involved in some of the applications. Its involvement and demands for information about political activity during the 2010 election cycle appears to have caused systematic delays in the processing of Tea Party applications,' wrote [Legislators] Issa, Camp, Jordan, and Boustany in their letter to Werfel. '[B]ased on his decades of experience, [career IRS official Carter Hull] determined he had enough facts to make recommendations whether to approve or deny the applications … However, Mr. Hull’s recommendations were not carried out. Instead, according to Michael Seto, the head of Mr. Hull’s unit in Washington, Lois Lerner instructed that the Tea Party applications go through a multi-layer review that included her senior advisor and the Chief Counsel’s office'..."Here are the salient points from the testimony of career IRS officials, according to the statement:
- Carter Hull, a tax law specialist and self-described 501(c)(4) expert with 48 years of experience, testified that he sent development letters, and once he received responses, based on his decades of experience, determined he had enough facts to make recommendations whether to approve or deny the applications.
- Mr. Hull’s recommendations were not carried out. Instead, according Michael Seto, the head of Mr. Hull’s unit in Washington D.C., Lois Lerner instructed that the Tea Party applications should go through a multi-layer review that included her senior advisor and the Chief Counsel’s office.
- According to Mr. Hull, sometime in the winter of 2010-2011, the senior advisor to Lois Lerner told him the IRS Chief Counsel’s office would need to review these applications. Mr. Hull also indicated this was the first time in his 48 year career at the IRS he was told to send an application to Ms. Lerner’s senior advisor.
- It was not until August 2011 that the Chief Counsel’s office held a meeting with Mr. Hull, Ms. Lerner’s senior advisor, and other Washington D.C. officials to discuss these test applications. During the intervening months, these applications languished.
- The Chief Counsel’s office instructed Mr. Hull that they needed updated information to evaluate the applications. Since the applications were up-to-date months earlier, when Mr. Hull made his recommendations, Mr. Hull testified that he found this request from the Chief Counsel’s office surprising. The Chief Counsel’s office also discussed the possibility of a template letter to develop all the Tea Party applications, including those being held in Cincinnati. Mr. Hull explained that all the applications were different and that a template was impractical.
- Mr. Hull’s supervisor, Ronald Shoemaker, provided insight on the type of additional information sought by the Chief Counsel’s office—namely, information about the applicants’ political activities leading up to the 2010 election.
- The lengthy review of the test applications in Washington created a bottleneck and caused the delay of other Tea Party applications in Cincinnati. Indeed, multiple IRS employees in Cincinnati – including Elizabeth Hofacre — have told the Committee they were waiting on guidance from Washington on how to move the applications forward.
- Mr. Hull explained that he could not provide advice to Ms. Hofacre because his hands were tied by his superiors in Washington. Therefore, none of these applications were approved or denied during the time he worked with Ms. Hofacre on the cases.
- The head of the Cincinnati office, Cindy Thomas, testified that she continuously asked senior Washington officials when guidance was coming, but it was to no avail.
- *All documents and communications between or among employees of the Internal Revenue Service, employees of the Department of the Treasury, or employees of the Executive Office of the President between February 1, 2010, and tghe present referring or relating to the 2010 election.
- *All documents and communications between or among employees of the Intrnal Revenue Service, employees of the Department of the Treasury, or empoloyees of the Executive Offfice of the President between February 1, 2010, and the present referring or relating to the 2010 Supreme Court decision, Citizens United v. Federal Election Commission.
- *All documents and communications between employees of the Internal Revenue Service, employees of the Department of the Treasury, or outside parties between February 1, 2010, and the present referring or relating to the tax-exempt status of Tea Party groups.
The hearings regarding the document requests and IRS-Tea Party targeting will resume today.
According to Oversight Committee Chairman Daryl Issa,
"...Washington and Cincinnati IRS officials have told Committee investigators that they understood Tea Party applications were being isolated from other cases and subjected to extra scrutiny to ensure fair, efficient, and consistent treatment...While President Obama has already dismissed the head of the IRS in the wake of this scandal, this hearing will examine why decisions to elevate cases to more senior levels of the IRS led to unjust delays and unfair treatment of Tea Party applications. The evidence gathered in this investigation makes clear that had Washington IRS officials simply kept their hands off these cases and allowed employees in the Cincinnati office to process applications independently, instead of facing excessive delays, these cases would have been processed just like other advocacy cases....Witnesses from both the Washington and Cincinnati offices will be asked to explain why, even as dozens of applications for progressive groups were being approved, orders from senior levels within the IRS resulted in inappropriate and disparate treatment for Tea Party applications...”
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